TARGET, E-COMMERCE WARS ESCALATE

Target's actions raise its position and intentions with internet sales.  Those e-commerce retailers who do not understand the new e-commerce driven by the new supply chain are now deeper in trouble.  It is now about much more than having a website and shipping orders.

 

Target lowers its free shipping threshold to $25

By Matt Lindner Research Analyst

The move gives Target the lowest free shipping threshold among retailers in the top 25 of Internet Retailer’s Top 500 Guide, except for Nordstrom.

Target Corp. is cutting its free shipping threshold in half on all orders placed through Target.com in an effort to gain a bigger piece of the e-commerce pie.
The retailer, No. 18 in the Internet Retailer 2104 Top 500 Guide in 2014, announced Monday that it has lowered the free shipping threshold for all online orders to $25 from $50.
“We saw an enthusiastic response to our free shipping offer over the holidays,” says Jason Goldberger, president of Target.com and Mobile. “Now, whether guests are stocking up or doing fill-in shopping, we’ve enhanced our year-round shipping offer to be one of the best in all of retail.”
The move gives Target the lowest free shipping threshold of any similar retailer in the top 25 in Internet Retailer’s Top 500 Guide, with the exception of Nordstrom Inc. (No. 24), which offers free shipping on all orders regardless of price. Here’s how Target’s free shipping threshold stacks up against some of its competitors, along with their ranking in the Internet Retailer Top 500 Guide:

• Amazon.com (No. 1) $35
• Staples Inc. (No. 3): $49.95
• Wal-Mart (No. 4): $50
• Sears Holdings Corp. (No. 5): $59
• Macy’s Inc. (No. 8): $99
• Best Buy Co.  (No. 15): $35
• The Home Depot Inc. (No. 16): Most orders over $45
• Gap Inc. (No. 19): $50
• Kohl’s (No. 23): $75

This marks the second time in the past eight months that Target has changed its shipping policies. In June, it announced that nearly all orders over $50 would ship for free, save for heavy and oversized objects, which would be subject to additional fees. In the past, only certain items in orders over $50 qualified for free shipping. The retailer also offers free in-store pickup of all online orders.
Last month, Target rolled out its Curbside app which allows shoppers to place orders online from a store, pay online and pick up orders without leaving their car. Employees bring the items to shoppers’ vehicles at designated locations within Target parking lots. In its Q3 2014 earnings report, Target reported year-over-year online sales growth of 30% for the quarter, and analysts peg that Q3 growth amount at around $160 million.
The Internet Retailer Top 500 estimates Target’s online sales totaled $2.3 billion in 2013.